Sunday, November 6, 2011

Redefining poverty, including by reference to the rural-urban axis

The U.S. government has for many decades measured poverty solely according to income. The "poverty line" for a family of four, for example, is $22,314. You can read more details here, but the bottom line is that if the family's income falls below that amount, the family is deemed to be living in poverty. Noncash benefits such as public housing, Medicaid, and SNAP are not included in the calculation of income. The poverty line does not vary from place to place; it is the same nationwide.

For years, I have been working to raise awareness of rural poverty, and for years people have been responding to this effort by asking, sometimes rather skeptically (if not, somehow, accusingly): But isn't poverty ameliorated in rural places because the cost of living is lower? Don't rural folks self-provision and barter services so that they really have access to more than their income alone suggests? (Read an academic piece about the issue here).

My standard reply to these questions has been "no, not really." I tend to explain that while the cost of housing is often lower in rural communities (excepting the ones in the midst of rural gentrification, of course) than in urban ones, transportation costs are often higher in rural places and food costs tend to be on par with metropolitan places. Sure, some rural residents have a greater opportunity to self-provision, as by growing their own food, but this does not necessarily mean that they do so. And many don't have any greater opportunity to do so than their urban counterparts. Indeed, a massive national study that I heard reported on a few years ago at the Rural Sociological Society meeting indicated that bartering and self-provisioning--that is, engagement in the informal economy--is no more prevalent in rural areas than in urban ones.

This issue of a rural-urban cost of living differential--as part of the broader issue of how we study poverty--has recently come to the fore nationally. As both the New York Times and NPR reported in recent weeks, for the past few years, the federal government has been considering additional or "supplemental" poverty measurements. You can read more here, and I understand a comprehensive report from the U.S. Census Bureau is due out tomorrow.

As the New York Times reported in last week's story, "Bleak Portrait of Poverty is Off the Mark, Experts Say," these new measures are likely to fuel great debate--both pro and con--over the value of and need for public benefits programs. Here's an excerpt from the story, which notes the role of the rural-urban continuum among other issues in the new supplemental poverty measures.
The fuller measures have also shown less poverty among children but more among older Americans, who are plagued by high medical costs. They have shown less poverty among blacks but more among Asians; less poverty in rural areas and more in cities and suburbs, where the cost of living is high. And they have found fewer people in abject destitution, but a great many more crowding the hard-luck ranks of the near poor, who do not qualify for many benefit programs and lose income to taxes, child care and medical costs. 
Here is what the U.S. Census Bureau website has to say about how geography is likely to factor into the new poverty measurements:
While most comments expressed support for the geographic adjustment of the thresholds, many urged the SPM to take into account geographic differences in the cost of all items included in the thresholds (and subtracted from income), particularly the cost of transportation. One comment suggested that the geographic adjustments be done at the county level rather than at the metropolitan statistical area. Several comments favored the continued use of U.S. Department of Housing and Urban Development Fair Market Rents to develop the housing cost index. Numerous comments expressed concern that after geographic adjustment thresholds for some rural areas would be lower than the current official threshold.
The proposed SPM will use American Community Survey data to adjust the thresholds for housing price differences across geographical areas. The geographic adjustments to the thresholds will be based on five-year ACS estimates of median gross rents for two-bedroom apartments with complete kitchen and plumbing facilities. Separate medians will be estimated for each of the 309 metropolitan statistical areas (MSAs) large enough to be identified on the public use version of the CPS ASEC file. For each state, a median is estimated for all non-metro areas (48), for each MSA with a population above the CPS ASEC limit (309), and for a combination of all other metro areas within a state (44). This index is normalized and applied to the share of the threshold which represents shelter and utility costs.

At this time, reliable data on regional price differences for the entire bundle of basic consumption items are not available. However, as per the Interagency Working Group suggestion, the Census Bureau and the Bureau of Labor Statistics will continue to explore additional methods to improve geographic adjustments, including urban and rural distinctions. (emphasis added)
A fair amount of that is the proverbial "Greek to me," but presumably all will be clarified when the new measurements are released tomorrow. I just hope that the clarification does not tend to diminish the hardships associated with low-income living in rural areas, and therefore detract from their ongoing need for government attention--and assistance.

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